California Gov. Gavin Newsom (D) has yet to explain how the biggest bank failure since the 2008 financial crisis happened on his watch — with Silicon Valley Bank, a California bank, under California regulations.
The federal government stepped in to protect depositors on Sunday, after a run on the bank last week made it insolvent. But it was first seized by the California Department of Financial Protection and Innovation (DFPI).
The Silicon Valley Bank was chartered in California and headquartered in Santa Clara, in the San Francisco Bay Area. In a state with a reputation for over-regulation, however, authorities failed to step in until it was too late.
On Sunday, Newsom issued a press statement welcoming federal intervention to protect the bank’s depositors:
The Biden Administration has acted swiftly and decisively to protect the American economy and strengthen public confidence in our banking system. Their actions this weekend have calmed nerves, and had profoundly positive impacts on California — on our small businesses that can now make payroll, workers who will get their paychecks, on affordable housing projects that can continue construction, and on non-profits that can keep their doors open tomorrow. California is a pillar of the American economy, and federal leaders did the right thing, ensuring our innovation economy can continue to grow and move forward.
Newsom said nothing about the actions, or inactions, of California regulators. It is unclear why he was silent.
An article Sunday in the conservative California Globe pointed out that a member of the bank’s board was also on the board of a gender equality organization co-founded by the state’s first lady, Jennifer Siebel Newsom.
While that may not be enough to establish a conflict of interest, it does point out the degree to which the bank was well connected in California political circles — connections that may have shielded it from closer scrutiny.
Newsom has built a national reputation for “progressive” social views, but has also presided over electricity shortages, a homeless crisis, and wildfires. Most recently, he left the state for Mexico during a deadly blizzard.
Joel B. Pollak is Senior Editor-at-Large at Breitbart News and the host of Breitbart News Sunday on Sirius XM Patriot on Sunday evenings from 7 p.m. to 10 p.m. ET (4 p.m. to 7 p.m. PT). He is the author of the new biography, Rhoda: ‘Comrade Kadalie, You Are Out of Order’. He is also the author of the recent e-book, Neither Free nor Fair: The 2020 U.S. Presidential Election. He is a winner of the 2018 Robert Novak Journalism Alumni Fellowship. Follow him on Twitter at @joelpollak.